The financial services industry is being increasingly influenced by trends in big data and machine learning. This post considers the extent to which these developments may influence prudential regulation of financial firms and markets.

Many fintech firms have made the unpleasant discovery that the financial services industry is one of the most highly regulated sectors. This post discusses the relationship between fintech and the financial supervisory agencies.

The market's view of the path of Federal Reserve monetary policy has an important impact on the term structure of interest rates and asset prices in general. This post discusses a new Atlanta Fed tool that uses Eurodollar options prices to infer market expectations about future short-term rates.

Smart contracts that rely on computer code are being promoted as possible replacements for paper contracts. This post uses the recent diversion of funds at the smart contract the Distributed Autonomous Organization (DAO) to analyze the two types of contracts.

Stigma has long inhibited use of the Federal Reserve's discount window. The Fed's Term Auction Facility (TAF) overcame stigma during the recent crisis. This post discusses the reasons for the TAF's success and some implications for the future.

The Atlanta Fed's recent Financial Markets Conference analyzed liquidity from the perspective of markets, institutions and central banks. This post discusses three takeaways from the conference related to improvements in measuring liquidity and the impacts of regulation and technology on liquidity.

Some analysts have recently called for structural changes to the banking industry to end too big to fail. This post looks back at the 1984 TBTF treatment of Continental Illinois to see whether these structural measures would have prevented the bailout.

Liquidity is a slippery concept but one that has important implications for the financial system. This post highlights some of the liquidity related issues that will be discussed in our upcoming Financial Markets Conference, Getting a Grip on Liquidity: Markets, Institutions, and Central Banks.

Bank stress tests require forecasting income statements and capital ratios under extreme economic assumptions. These assumptions often go beyond historical experience, which makes good forecasting with a quantitative model difficult. This post explains how Bayes' theorem can help deal with these extreme assumptions, resulting in better forecasts.

The federal government, Fannie Mae, and Freddie Mac developed the Home Affordable Refinance Program (HARP) to help distressed mortgage borrowers. This post shows that HARP initially gave a competitive advantage to current servicers, which resulted in limited competition.

Notes from the Vault was on hiatus after the March/April 2012 post; it restarted in March 2013.